HMO and Council tax decision has caused an issue with the inclusive AST contract?

Make Text Bigger

I was ‘threatened’ some time ago with my HMO tenants being liable for council tax – or rather their rooms are – this has now come to pass and I’ve been sent council tax demands in my name for all rooms.

I’ve been back to the department and they will now issue them in my tenants’ names. I’ve argued the toss on this, but an interesting point is that the valuation department does not recognise ‘HMO’ and anywhere that someone can live is a dwelling and every dwelling is liable for council tax – so be warned other HMO owners or convertors, you could be captured under this daft decision if your house cannot be used as a family home ‘with no changes’ when the sharers move out.

Anyway my issue now is that the tenant’s contracts have ‘council tax included’ in their contracts – are the council now voiding my contract, how do I now get the tenants to pay if their contract says it is included?

This has come to pass by the way because someone has claimed housing benefit and an inspection was done (unknown to me but it is down on the record that I denied access which is an absolute lie, my first knowledge of this was an email from the council department) and accessed the property without my permission. Interestingly the Valuation Department do not have right of access without my permission and they were surprised that the council gained access without.

Bottom line really is how do I now get out of the clause of inclusive council tax, I’ve written to my tenants informing them that this is about to happen and again that it is now happening and obviously I will return to them the portion of council tax that I pay and have offered to help as much as I can by making a reduction in rent. I’m waiting for their responses and if someone brings up the contract issue. I’m a bit loath to pay all (around £10,000) a year as there is going to be one (at least) who is not paying council tax and dropped the whole house in it in the first place.

I am guessing that I need to give them all notice and reissue new contracts to those who stay.

Yes, the tenants will be billed directly - of course any voids it will be my responsibility. I currently pay around £1800 per year - each tenant is paying between £850 and £960 per year, with 11 of them that is a considerable amount increase for the house. Considering it is one of the worst run boroughs in London it is pretty insulting that the money collected will just go down a bit black hole.

I think that you are not able to avoid being liable for Council Tax on your HMO. It is the landlord's responsibility and if you have issued a AST that says the CT is included you have shot yourself in the foot.
On future tenancy agreements you may be able to say that you reserve the right to charge the tenant the equivalent of the CT but it remains your responsibility to pay it. The council will not be interested in serving CT demands on individual tenants when they have a legitimate right to charge the landlord of an HMO one amount for the whole building.
As far as I know this has been the law for several years and I am surprised you have not been aware of it. It is just part of the fun of being a landlord. It gets even more interesting when some tenants are on HB or are students who forget or lose their exemption certificates .
I would like to be proved wrong because sorting out CT on HMOs is a bloody nightmare with tenants coming and going, the council sometimes behaving rationally and other times just issuing County Court summons after ignoring letters and calls on the matter....and HMRC regarding our rents as "investment" income.
If you leave it to the agents to sort it out they soon give up and pay everything the council demands whether it is right or wrong.... why should they care it is not their money?

I do not think that is the case....our HMOs are charged Council Tax on the property as a whole and at similar rate to similar houses next door but we no longer( for the last four or five years) get any relief for voids and for student houses for the vacations .....and in fact only from the day their course starts.So if they move in at the end of July and term starts at the end of September CT is due for the two months....asking students for that figure is met with shock and horror.

Thanks for the responses so far - but looks like no one really knows - I know that I can't avoid it and I wasn't avoiding council tax, I was paying as I had since 1999 and it had never been questioned. My HMO licensing is via the local authority - Lambeth - so it's not as though anything was being hidden.

I wouldn't have said that I'd 'shot myself in the foot' - I was paying the council tax requested and not charging the tenants so this was reflected in the relevant part of the AST. I could have added a little clause that 'should the rooms be separately valued they will then pay' but it hadn't crossed my mind that council tax would be payable on a room in a house, I could add. Hindsight is all well and good Nick. I will now redo the tenancy agreements of those that decide to stay, they are all on periodic tenancies now.

The Council HAVE valued each room and billed each tenant so I don't know where you have your information NIck, as long as the tenants stay as long as they have in the past then it should be too much hastle and I can't see how they can bill me for the whole house when I rent it out - and most will get their 25% single person discount, or perhaps the odd student (meant kindly) so they can't bill me as a whole - but I will be liable should there be a void.

It is very unfair in council tax terms as it was £1800 and now Lambeth will be getting around £9000.

I'm surprised no one has mentioned the Pole Tax as was and hated - I thought it a damn good idea then and I do now.

There will be one person in the house who will not be paying council tax of course and that ironically is the one who is claiming benefits and started this whole thing off.

It seems your council has a different system to mine - but the valuation department is nationwide and follow the same rules and regs so I will chase this.

Can I be clear - you are being charged a similar rate for an HMO as a house next - are you absolutely positive then that you are being charged as an HMO? I was told very clearly that HMO is not a term recognised by the valuation department, it is one residence - or nothing - the criteria being that to have a single council tax you can return the HMO back to one residence with no further work, literally all the tenants move out and a family move in and no one could have known - mine have mini kitchens - always did.

When I spoke to the valuation department initially they told me that many HMO's will now be captured because very few have 'family facilities' - as an HMO has a statutory requirement for kitchens and bathrooms.

They can charge per room on an HMO. I was interested in converting a house to an HMO and had some heated arguments with the council office about them wanting to charge by the room.

One council advisor said if a fridge or microwave was in the room it was charged
One council advisor said if a lock on the door it was charged
One coundil advisor said if separate tenancies but if 4 sharers were on the same tenancy then not.

I spoke with a valuation officer in Cornwall in the end and he said yes the council could charge it .
It was up to the councils if they did.

I also think that they can count it has a new dwelling ie was 1 house now 5 rooms so increase of 4 units and can claim 3years from the government for same amount.

How can the rooms be a cheaper option when they get billed the A rate which is the same as a studio/ 1 bed. RLA I think were trying to get a new band of £300 for rooms at one time.

Previous Article

Next Article

Privacy Policy

Privacy PolicyBACKGROUND:
Property118 Ltd understands that your privacy is important to you and that you care about how your personal data is used and shared online. We respect and value the privacy of everyone who visits this website, www.property118.com (“Our Site”) and will only collect and use personal data in ways that are described here, and in a manner that is consistent with Our obligations and your rights under the law.
Please read this Privacy Policy carefully and ensure that you understand it. Your acceptance of Our Privacy Policy is deemed to occur upon your first use of Our Site. If you do not accept and agree with this Privacy Policy, you must stop using Our Site immediately.

Definitions and Interpretation

In this Policy the following terms shall have the following meanings:

“Account”

means an account required to access and/or use certain areas and features of Our Site;

“Cookie”

means a small text file placed on your computer or device by Our Site when you visit certain parts of Our Site and/or when you use certain features of Our Site. Details of the Cookies used by Our Site are set out in section 13, below;

means any and all data that relates to an identifiable person who can be directly or indirectly identified from that data. In this case, it means personal data that you give to Us via Our Site. This definition shall, where applicable, incorporate the definitions provided in the EU Regulation 2016/679 – the General Data Protection Regulation (“GDPR”); and

Our Site is owned and operated by Property118 Ltd, a limited company registered in England under company number 10295964, whose registered address is 1st Floor, Woburn House, 84 St Benedicts Street, Norwich, NR2 4AB.

Our VAT number is 990 0332 34.

Our Data Protection Officer is Neil Patterson, and can be contacted by email at npatterson@property118.com, by telephone on 01603 489118, or by post at 1st Floor, Woburn House, 84 St Benedicts Street, Norwich, NR2 4AB.

What Does This Policy Cover?

This Privacy Policy applies only to your use of Our Site. Our Site may contain links to other websites. Please note that We have no control over how your data is collected, stored, or used by other websites and We advise you to check the privacy policies of any such websites before providing any data to them.

Your Rights

As a data subject, you have the following rights under the GDPR, which this Policy and Our use of personal data have been designed to uphold:

The right to be informed about Our collection and use of personal data;

The right of access to the personal data We hold about you (see section 12);

The right to rectification if any personal data We hold about you is inaccurate or incomplete (please contact Us using the details in section 14);

The right to be forgotten – i.e. the right to ask Us to delete any personal data We hold about you (We only hold your personal data for a limited time, as explained in section 6 but if you would like Us to delete it sooner, please contact Us using the details in section 14);

The right to restrict (i.e. prevent) the processing of your personal data;

The right to data portability (obtaining a copy of your personal data to re-use with another service or organisation);

The right to object to Us using your personal data for particular purposes; and

If you have any cause for complaint about Our use of your personal data, please contact Us using the details provided in section 14 and We will do Our best to solve the problem for you. If We are unable to help, you also have the right to lodge a complaint with the UK’s supervisory authority, the Information Commissioner’s Office.

For further information about your rights, please contact the Information Commissioner’s Office or your local Citizens Advice Bureau.

What Data Do We Collect?

Depending upon your use of Our Site, We may collect some or all of the following personal data (please also see section 13 on Our use of Cookies and similar technologies):

Name;

Date of birth;

Address and post code;

Business/company name and trading status;

Number of properties owned;

Accountants details;

Contact information such as email addresses and telephone numbers;

Proof of residence and ID;

Financial information such as income and tax status;

Landlords insurance renewal dates;

Property Portfolio details such as value and mortgage outstanding;

How Do We Use Your Data?

All personal data is processed and stored securely, for no longer than is necessary in light of the reason(s) for which it was first collected. We will comply with Our obligations and safeguard your rights under the GDPR at all times. For more details on security see section 7, below.

Our use of your personal data will always have a lawful basis, either because it is necessary for our performance of a contract with you, because you have consented to our use of your personal data (e.g. by subscribing to emails), or because it is in our legitimate interests. Specifically, we may use your data for the following purposes:

Providing and managing your access to Our Site;

Supplying our products and or services to you (please note that We require your personal data in order to enter into a contract with you);

Personalising and tailoring our products and or services for you;

Replying to emails from you;

Supplying you with emails that you have opted into (you may unsubscribe or opt-out at any time by the unsubscribe link at the bottom of all emails;

Analysing your use of our site and gathering feedback to enable us to continually improve our site and your user experience;

Provide information to our partner service and product suppliers at your request.

With your permission and/or where permitted by law, We may also use your data for marketing purposes which may include contacting you by email and or telephone with information, news and offers on our products and or We will not, however, send you any unsolicited marketing or spam and will take all reasonable steps to ensure that We fully protect your rights and comply with Our obligations under the GDPR and the Privacy and Electronic Communications (EC Directive) Regulations 2003.

You have the right to withdraw your consent to us using your personal data at any time, and to request that we delete it.

We do not keep your personal data for any longer than is necessary in light of the reason(s) for which it was first collected. Data will therefore be retained for the following periods (or its retention will be determined on the following bases):

Member profile information is collected with your consent and can be amended or deleted at any time by you;

Anti-Money Laundering information and tax consultancy records are to be kept as required by law for up to seven years.

How and Where Do We Store Your Data?

We only keep your personal data for as long as We need to in order to use it as described above in section 6, and/or for as long as We have your permission to keep it.

Some or all of your data may be stored outside of the European Economic Area (“the EEA”) (The EEA consists of all EU member states, plus Norway, Iceland, and Liechtenstein). You are deemed to accept and agree to this by using our site and submitting information to Us. If we do store data outside the EEA, we will take all reasonable steps to ensure that your data is treated as safely and securely as it would be within the UK and under the GDPR

Data security is very important to Us, and to protect your data We have taken suitable measures to safeguard and secure data collected through Our Site.

Do We Share Your Data?

We may share your data with other partner companies in for the purpose of supplying products or services you have requested.

We may sometimes contract with third parties to supply products and services to you on Our behalf. Where any of your data is required for such a purpose, We will take all reasonable steps to ensure that your data will be handled safely, securely, and in accordance with your rights, Our obligations, and the obligations of the third party under the law.

We may compile statistics about the use of Our Site including data on traffic, usage patterns, user numbers, sales, and other information. All such data will be anonymised and will not include any personally identifying data, or any anonymised data that can be combined with other data and used to identify you. We may from time to time share such data with third parties such as prospective investors, affiliates, partners, and advertisers. Data will only be shared and used within the bounds of the law.

In certain circumstances, We may be legally required to share certain data held by Us, which may include your personal data, for example, where We are involved in legal proceedings, where We are complying with legal requirements, a court order, or a governmental authority.

What Happens If Our Business Changes Hands?

We may, from time to time, expand or reduce Our business and this may involve the sale and/or the transfer of control of all or part of Our business. Any personal data that you have provided will, where it is relevant to any part of Our business that is being transferred, be transferred along with that part and the new owner or newly controlling party will, under the terms of this Privacy Policy, be permitted to use that data only for the same purposes for which it was originally collected by Us.

How Can You Control Your Data?

In addition to your rights under the GDPR, set out in section 4, we aim to give you strong controls on Our use of your data for direct marketing purposes including the ability to opt-out of receiving emails from Us which you may do by unsubscribing using the links provided in Our emails.

Your Right to Withhold Information

You may access certain areas of Our Site without providing any data at all. However, to use all features and functions available on Our Site you may be required to submit or allow for the collection of certain data.

You may restrict Our use of Cookies. For more information, see section 13.

How Can You Access Your Data?

You have the right to ask for a copy of any of your personal data held by Us (where such data is held). Under the GDPR, no fee is payable and We will provide any and all information in response to your request free of charge. Please contact Us for more details at info@property118.com, or using the contact details below in section 14.

Our Use of Cookies

Our Site may place and access certain first party Cookies on your computer or device. First party Cookies are those placed directly by Us and are used only by Us. We use Cookies to facilitate and improve your experience of Our Site and to provide and improve Our products AND/OR We have carefully chosen these Cookies and have taken steps to ensure that your privacy and personal data is protected and respected at all times.

All Cookies used by and on Our Site are used in accordance with current Cookie Law.

Before Cookies are placed on your computer or device, you will be shown a cookie prompt requesting your consent to set those Cookies. By giving your consent to the placing of Cookies you are enabling Us to provide the best possible experience and service to you. You may, if you wish, deny consent to the placing of Cookies; however certain features of Our Site may not function fully or as intended. You will be given the opportunity to allow only first party Cookies and block third party Cookies.

Certain features of Our Site depend on Cookies to function. Cookie Law deems these Cookies to be “strictly necessary”. These Cookies are shown below in section 13.5. Your consent will not be sought to place these Cookies, but it is still important that you are aware of them. You may still block these Cookies by changing your internet browser’s settings as detailed below in section 13.9, but please be aware that Our Site may not work properly if you do so. We have taken great care to ensure that your privacy is not at risk by allowing them.

The following first party Cookies may be placed on your computer or device:

Name of Cookie

Purpose

Strictly Necessary

JSESSIONID

Used only to collect performance data, with any identifiable data obfuscated

No

__cfduid

This cookie is strictly necessary for Cloudflare's security features and cannot be turned off.

Yes

Our Site uses analytics services provided by Google Analytics and Facebook. Website analytics refers to a set of tools used to collect and analyse anonymous usage information, enabling Us to better understand how Our Site is used. This, in turn, enables Us to improve Our Site and the products AND/OR services offered through it. You do not have to allow Us to use these Cookies, however whilst Our use of them does not pose any risk to your privacy or your safe use of Our Site, it does enable Us to continually improve Our Site, making it a better and more useful experience for you.

The analytics service(s) used by Our Site use(s) Cookies to gather the required information.

The analytics service(s) used by Our Site use(s) the following Cookies:

Name of Cookie

First / Third Party

Provider

Purpose

__utma, __utmb, __utmc, __utmt, __utmz

First

Google

Helps to understand how their visitors engage with our website

_fbp

First

Facebook

Helps to understand how their visitors engage with our website

In addition to the controls that We provide, you can choose to enable or disable Cookies in your internet browser. Most internet browsers also enable you to choose whether you wish to disable all cookies or only third party cookies. By default, most internet browsers accept Cookies but this can be changed. For further details, please consult the help menu in your internet browser or the documentation that came with your device.

You can choose to delete Cookies on your computer or device at any time, however you may lose any information that enables you to access Our Site more quickly and efficiently including, but not limited to, login and personalisation settings.

It is recommended that you keep your internet browser and operating system up-to-date and that you consult the help and guidance provided by the developer of your internet browser and manufacturer of your computer or device if you are unsure about adjusting your privacy settings.

Contacting Us

If you have any questions about Our Site or this Privacy Policy, please contact Us by email at info@property118.com, by telephone on 01603 489118, or by post at 1st Floor, Woburn House, 84 St Benedicts Street, Norwich, NR2 4AB. Please ensure that your query is clear, particularly if it is a request for information about the data We hold about you (as under section 12, above).

Changes to Our Privacy Policy

We may change this Privacy Policy from time to time (for example, if the law changes). Any changes will be immediately posted on Our Site and you will be deemed to have accepted the terms of the Privacy Policy on your first use of Our Site following the alterations. We recommend that you check this page regularly to keep up-to-date.

Report this comment

Sorry. You must be logged in to view this form.

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents